COA 2009 Minutes: October 30, 2009 (Nos. 1100-1136)

1101 – WHISTLEBLOWER ACT, PRIMA FACIE CASEPOWERS V. LEXINGTON-FAYETTE URBAN COUNTY GOV'TAFFIRMING AS TO APPEAL AND CROSS-APPEAL** ** ** ** **BEFORE: COMBS, CHIEF JUDGE; ACREE, JUDGE; BUCKINGHAM,1 SENIOR JUDGE.ACREE, JUDGE: After a jury verdict in favor of her former employer Lexington- Fayette Urban County Government (LFUCG), Donna Powers appeals the trial court’s denial of her motions for directed verdict, for judgment notwithstanding theverdict, and for a new trial, on her claim brought pursuant to Kentucky’s Whistleblower Act, KRS 61.101 et seq. (the Act). LFUCG cross-appeals, arguing that Powers failed to present evidence of a prima facie case and, therefore, the trial court erred by not directing a verdict in its favor. Finding neither appeal meritorious, we affirm as to both.

1102 – PROPERTY LAW, EQUITABLE SUBROGATION, LIEN PRIORITYROBERTS V. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.REVERSING AND REMANDING** ** ** ** **BEFORE: COMBS, CHIEF JUDGE; THOMPSON, JUDGE; BUCKINGHAM,1 SENIOR JUDGE.THOMPSON, JUDGE: Joseph B. Roberts appeals from an order of the Henderson Circuit Court granting a motion for default and summary judgment made by Mortgage Electronic Registration Systems, Inc. (MERS). Roberts argues that the trial court erred when it applied the doctrine of equitable subrogation and held that MERS’s lien had priority over his lien in a foreclosure action. We reverse and remand the case for further proceedings.

1113 – PROPERTY, FORECLOSURE, GUARDIAN AD LITEM FOR INCARCERATEDGOLDSMITH V. FIFTH THIRD BANKVACATING AND REMANDING** ** ** ** ** BEFORE: ACREE, STUMBO, AND WINE, JUDGES.WINE, JUDGE: Appellant, Martin Goldsmith (“Goldsmith”), appeals from an entry of summary judgment in favor of the appellee, Fifth Third Mortgage Company (“Fifth Third”) concerning four properties he owned which were sold at foreclosure sale and purchased by Fifth Third. On appeal, he argues that the foreclosure sales were invalid as he was incarcerated at the time of the proceedingsand a guardian ad litem was not properly appointed pursuant to Kentucky Rules of Civil Procedure (“CR”) 17.04. He also argues that Fifth Third lacked standing to submit its motion for summary judgment because it no longer had liens on the subject properties at the time the motion was filed. We disagree.

1115 – INSURANCE, NO FAULT ACT, ADDED REPARATION BENEFITS, COVERAGE/STACKINGCAIN V. AMERICAN COMMERCE INS. CO., INC.AFFIRMING** ** ** ** ** BEFORE: ACREE, STUMBO, AND WINE, JUDGES.STUMBO, JUDGE: Julia Cain appeals from a Declaratory and Final Judgment of the Jefferson Circuit Court interpreting KRS 304.39-140 and determining that American Commerce Insurance Company, Inc. fully satisfied its obligation to pay benefits under an insurance policy it issued to Cain. After being injured in an automobile accident in which the other driver was at fault, Cain received basicreparation benefits of $10,000.00 from American Commerce plus added reparation benefits of $20,000.00 for each of her three vehicles for a total of $70,000.00. In an action initiated by American Commerce seeking a declaratory judgment, the Jefferson Circuit Court determined that American Commerce fully satisfied its obligation to Cain. Cain now argues that the court erred in failing to conclude that she was entitled to $40,000.00 in added reparation benefits per vehicle for a total of $130,000.00 ($10,000.00 in basic reparation benefits plus $120,000.00 in added reparation benefits). We agree with the reasoning of the Jefferson Circuit Court, and accordingly affirm the Declaratory and Final Judgment on appeal.

1116 – CRIMINAL, NEW TRIALCOMMONWEALTH OF KY. V. BREWEROPINION AND ORDER REVERSING AND REINSTATING CONVICTION** ** ** ** ** BEFORE: ACREE, TAYLOR AND THOMPSON, JUDGES.APPELLEEACREE, JUDGE: The Commonwealth appeals from the July 1, 2008 order of the Jefferson Circuit Court voiding the jury verdict and granting Kelly Gaye Brewer a new trial. For the following reasons, we reverse.

1119 – CRIMINAL, SENTENCING, DEVORE HEARINGCAMPBELL V. COMMONWEALTH OF KYAFFIRMING** ** ** ** ** BEFORE: CAPERTON, DIXON AND TAYLOR, JUDGES.APPELLEECAPERTON, JUDGE: James Campbell appeals the denial by the Fayette Circuit Court of his Kentucky Rules of Civil Procedure (CR) 60.02 motion to correct his sentence in light of the recent Kentucky Supreme Court opinion of Peyton v. Commonwealth, 253 S.W.3d 504 (Ky. 2008).1 Campbell argues that he was entitled to relief and an evidentiary hearing under CR 60.02 as his sentence is now in error because the trial court followed the Devore interpretation of KRS 533.060(2), now overruled by Peyton. He also argues that the trial court wrongfully denied his motion for additional findings of fact and conclusions of law under CR 52.04, filed after the trial court overruled his current CR 60.02 motion. The Commonwealth disagrees. After a review of the parties’ arguments, the record, and the applicable law, we find no error in the denial of either Campbell’s CR 60.02 motion nor his CR 52.04 motion by the Fayette Circuit Court and, accordingly, we affirm.

1121 – CONTRACTS – ASSIGNABILITY OF COVENANTS NOT TO COMPETEKEGEL V. TILLOTSONREVERSING AND REMANDING** ** ** ** ** BEFORE: CAPERTON, DIXON AND TAYLOR, JUDGES.APPELLEECAPERTON, JUDGE: Russ Kegel and Mona Kegel (d/b/a Unique Promotional Products)(hereinafter Kegel) appeal the September 29, 2008, order of the McCracken Circuit Court granting the motion for summary judgment filed by Appellee, Roxanna Tillotson (Tillotson), and simultaneously denying the motion for summary judgment filed by Kegel. After a thorough review of the record, the arguments of the parties, and the applicable law, we reverse and remand.

In agreeing with this reasoning, we are compelled to agree with theAppellants that the trial court, in the matter sub judice, erred in finding that the non-compete clause was not assignable. Accordingly, we reverse, and turn to the second issue raised on appeal, concerning whether or not the court below correctly found that the non-compete clause in the matter sub judice was unconscionable.

As noted, the court below found, without further elaboration, that “the non-compete clause with its term of 5 years and distance of 350 miles was so unconscionable as to be void on its face as against public policy . . . .” Having reviewed the record and the arguments of the parties, this Court is of the opinion that the court below prematurely entered judgment on the issue of unconscionability. At the time that the court entered summary judgment, no depositions had been taken, substantial evidence had not been gathered, and only one set of interrogatories had been exchanged.

As this Court previously held in Hammons v. Big Sandy Claims Service, Inc., 567 S.W.2d 313 (Ky. App. 1978), agreements on restraint of trade are reasonable if, “on consideration of the subject, nature of the business, situation of the parties and circumstances of the particular case, the restriction is such only as to afford fair protection to the interests of the covenantee and is not so large as to interfere with the public interests or impose undue hardship on the party restricted.” Id. at 315. Clearly, whether or not a particular non-compete clause is conscionable is an issue that is highly f
act specific and, we believe, will more appropriately be addressed in the course of additional discovery.

In addition, our courts have adopted a “blue pencil” rule, whereby we are empowered to reform or amend restrictions in a non-compete clause if theinitial restrictions are overly broad or burdensome. As stated by this Court in Hammons, supra, at 315, “[w]here the covenant as originally drawn has been found too broad, courts have had no difficulty in restricting it to its proper sphere and enforcing it only to that extent.” See also Ceresia v. Mitchell, 242 S.W.2d 359 (Ky. 1951).

Accordingly, we believe it appropriate to remand this matter to the court below for additional findings on the issue of unconscionability, as well as a determination as to what, if any, action is appropriate by the court under the “blue pencil” rule.

1129 – APPEALS, ANDERS BRIEFSG.(C.R.) V. CABINET FOR HEALTH AND FAMILY SERVICESAFFIRMING** ** ** ** ** BEFORE: STUMBO, THOMPSON AND WINE, JUDGES.THOMPSON, JUDGE: C.R.G. a/k/a C.R.M. (mother) and M.M. (father) appeal an order of the Kenton Family Court terminating their parental rights to their minor children. The parents’ counsel filed briefs in which they state they were unable to find error which would entitle the parents to relief and requested this Court to review the record for prejudicial error pursuant to Anders v. California, 386 U.S. 738, 87 S.Ct. 1396, 18 L.E.2d 493, reh’g denied, 388 U.S. 924, 87 S.Ct. 2094, 18 L.E.2d. 1377 (1967).

An Anders brief supplements a motion to withdraw filed after counsel has conscientiously reviewed the record and found the appeal to be frivolous. In Anders, the court outlined the proper procedure to be followed as follows:A copy of counsel's brief should be furnished the indigent and time allowed him to raise any points that he chooses; the court-not counsel-then proceeds, after a full examination of all the proceedings, to decide whether the case is wholly frivolous. If it so finds it may grant counsel's request to withdraw and dismiss the appeal insofar as federal requirements are concerned, or proceed to a decision on the merits, if state law so requires. On the other hand, if it finds any of the legal points arguable on their merits (and therefore not frivolous) it must, prior to decision, afford the indigent the assistance of counsel to argue the appeal. Id. at 744, 87 S.Ct. at 1400. The Supreme Court referred only to criminal cases to which the Sixth Amendment right to counsel applies and did not extend its decision to civil cases. A review of the case law reveals that the states have not reached a uniform decision as to whether Anders is applicable to termination of parental rights cases. However, the majority of states that have addressed the scope of Anders have held it applicable to termination of parental rights appeals on the basis of the right to counsel under their own state laws. See In re N.B., 183 N.C.App. 114, 644 S.E.2d 22 (2007) (discussing the view that an Anders brief may be filed in termination of parental rights appeals).

The issue of the applicability of Anders has not been brought to the attention of this Court by the parties and, because the briefs filed are not accompanied by motions to withdraw, we decline to consider them as Anders briefs and to address whether Anders may be invoked in a termination of parental rights case. Instead, we have thoroughly reviewed the record and conclude that the family court’s findings are supported by clear and convincing evidence. Therefore, we affirm the order terminating the parents’ parental rights.

1134 – JUVENILES, COMMITTING MINOR TO CUSTODY OF CABINETS.(J.) V. COMMONWEALTH OF KYAFFIRMING** ** ** ** ** BEFORE: ACREE, CAPERTON AND KELLER, JUDGES.ACREE, JUDGE: J.S., a child under the age of eighteen, seeks reversal of the Fayette County Family Court decision committing him to the Cabinet for Health and Family Services (Cabinet) as a habitual runaway. The family court determined that commitment was necessary to end J.S.’s delinquent behavior and ensure his safe withdrawal from a local gang. J.S’s status as a habitual runaway, coupled with his extensive involvement with the gang, rendered community-based alternatives inadequate. The decision of the family court is affirmed.